Fralin Donates $50 Million for Roanoke Research Center

Heywood Fralin, his wife Cynthia, and the Horace Fralin Charitable Trust have announced a $50 million gift to Virginia Tech to attract top-ranked scientists to the university’s Roanoke medical research center. The gift is twice the size of the university’s previous single largest donation.

“I came up with the size based on what I felt I could do. I wanted to make a maximum gift that was a challenge to me and to the trust because I thought it was important to the community. And I thought it could benefit everyone, and it would have a lasting impact that would help to change the future of the Roanoke Valley and the surrounding area,” Fralin said in a Wednesday interview with the Roanoke Times.

“I’ve told governors this. I’ve told legislators this: I don’t think there is an economic development project in Virginia that will be more successful than this one,” he said. “That’s a large statement. I hope I don’t have to take it back.”

Virginia Tech is partnering with Carilion Clinic, western Virginia’s dominant health provider, to build a medical school and research center in Roanoke. The med-ed complex has been a major source of growth for the local economy, which has been battered in recent years by the departure of Norfolk Southern railroad operations and the loss of other major employers. Fralin’s gift will make the center more competitive in the recruitment of top research talent.

Fralin, who is chairman of Medical Facilities of America, a regional provider of nursing and rehabilitative care, has made Virginia higher education his mission in life. As chairman of the State Council of Higher Education for Virginia (SCHEV), he has been an outspoken supporter of Virginia higher ed community, and he has worked to position SCHEV as an institutional advocate for the states’ public colleges and universities.

As a taxpayer, I have major misgivings about Fralin’s take on higher-ed. Judging by his comments at SCHEV meetings, Fralin blames the middle-class college affordability crisis almost entirely on state funding cutbacks. I never heard him criticize higher-ed institutions for their runaway costs. But I have to respect him for making this massive donation. He’s not asking others to do something he’s not willing to do himself. He is truly putting his money where his mouth is. He deserves the thanks of all Virginians for his generosity.

As an aside, I have to say that Virginia Tech is on a roll. Under the leadership of President Timothy Sands, Tech has done an outstanding job of expanding its academic research empire. Last year the university persuaded the General Assembly to fund CyberX, a $65 million cyber-security program, in which Tech will be the dominant player. Last month Sands announced plans to build a $1 billion Northern Virginia technology campus near the new Amazon, Inc., mega-facility. Now Fralin is donating $50 million to build the Roanoke medical research complex. And those are just the big-ticket items.

Tech has accomplished more in recent years than Virginia’s other major research universities — the University of Virginia, Virginia Commonwealth University, and George Mason University — put together. Furthermore, Tech has expanded its research horizons while doing a better job than its peers of moderating the inexorable increase in tuition, fees and other costs of attendance. As critical as I often am of Virginia’s higher-ed establishment, I have to give credit where credit is due.

6 responses to “Fralin Donates $50 Million for Roanoke Research Center”

Not too shabby for a College out in the “sticks” and all those more urban ones – should be prioritized!

The thing about Mr. Fralin that sets him apart from other rich folks is that he wants to give back… like Warren Buffett and Bill Gates and others, in a day and time when other rich folks are demonizing the poor and demanding more and more tax cuts so they can accumulate even more wealth.

In doing volunteer taxes… I am ashamed at how many folks with really most incomes – will give $3000 to their church and cannot claim any of it as a deduction… they know it but they still give. Others with much higher incomes are looking for every additional dollar they can deduct to increase their tax refunds.

That pretty much illustrates the different types of folks in our world these days. Some want to give and help others while others want every cent they can get their hands on….

As noted above, some relevance to these issues, and how they work in practice, are found in “Awkward Questions for Roanoke’s Health Sciences Campus” posted on May 24,2018, including this exchange instigated by Izzo:

“To this RF3rd comment IZZO replied:

A lot of good comments here. I think public higher education should not have been instituted in the way it was in the U.S., with public universities being directly subsidized by the state. I think it should have been done more along the lines of a TAG system for public and private, perhaps similar to the way the UK system works, with the grant going to the individual. I don’t see the current system changing, though.

I also agree that the role of non-profits needs to be looked at in healthcare and higher education. In healthcare, I think non-profit status is leading to reduced competition as these non-profit behemoths squelch competition in their regions with their preferred tax status. In higher education, endowments compound untaxed at institutions where it is a stretch to say the non-profit status actually serves the public good (think Princeton and its $22+B endowment for about 8K students).

Healthcare and higher education come together in large universities. As an example, Jim cites UVA $8.6B endowment in the article. I’m sure many would like to think this all came from generous private sector donors, but my estimate would be at least 30% of it actually came from what were “quasi-endowments” originating on the health care side. (The percentage of VCU’s $1.6B endowment originating from the health care side is probably well over 50%. Ever wonder why VCU has a significantly larger endowment than Virginia Tech or why VT wanted to create a medical school/health system?) So a non-profit hospital has actually turned a profit based on patient fees (private insurance, medicare, medicaid, out of pocket), and the money is now controlled by the administration and the Board of Visitors. And as indicated before, a lot of it it accumulates through compounded tax-free growth.

One more note. The public/private distinction is already a fallacy. Private schools receive public benefits from 1) tax exempt status 2) government grants for research, etc. and 3) subsidized student grants and loans. If you include all of this, Princeton receives 10X the public benefit of the average public school.

To IZZO’s comment, I Reed Fawell 3rd replied:

These are very insightful comments Izzo. For example:

The hospital connection, the milking of “patient fees (private insurance, medicare, medicaid, out of pocket)” that you brought to light earlier, has not received the prominence and scrutiny that it has long deserved. It is yet another corruption hidden within a thoroughly corrupt system. Imagine, it is incredible, but also true that university health care is as corrupt in its our way and means as Division 1 university basketball that is riddled with corruption.

Your other comments are also highly significant. They puncture the grand myth that the “Ivies” are private institutions when in fact their vast and ever growing wealth, bloated now to obscene proportions, more and more today give them monopolistic power and unassailable financial advantage, over the entire system of American higher education with ever more power and advantage built on the backs of taxpayers and thoroughly corrupt public policies enacted and maintained by their own elite graduates who pull the levers of power, hand out public monies of this nation, and exempt it from taxation for the benefit of their alma maters.

Of course, as you point out, this also applies to non-profits such as Inova. Hence the joint venture of Inova / UVa medical center in Northern Virginia is designed to be a cash cow crony monopoly built out of crony capitalism of the worst sort, posing as a great savior working in the public interests. This sounds harsh. It is and it is well deserved. In life one can never separate ways and means from ends. All three, working in collusion, will inevitably corrupt the result, and end up corrupting that end absolutely. For example, the long term chronic problem of infections of patients at UVA hospital.

To this comment, IZZO replied:
Good comments from Reed. He’s been trying to light the kindling under this issue for a while and I do hope it gets the fact-based consideration it deserves.”

End of earlier Quotes from comments made to Jim Bacon’s March 12, 2018 article titled WHAT’S WRONG WITH UVa, and WHAT’S NOT.

For a guy who puts his long titled posts into the comment strings, as well as in the place where they should go and stay, namely in the lists of posts at the top, I am surprised at your complaint. On the other hand this earlier string helps to explain the impact and significance of this particular gift on Va. Tech, and its community, how its characteristics has special impact on both, and potentially also on the donor as well, and also on students educations.

It also helps to explain the special significance and boost the $50 Million gift provides Va. Tech after the $30 million paid out or the VA. Strategic (Research) Investment Fund by UVA to buy one of Virginia Tech’s premiere medical research teams and its leader away from its Biocomplexity Institute of Virginia Tech, and replicate it in Arlington UVa’s Fairfax health center at the Inova Bioinformatics campus., dashing the hopes and resources earlier invested by Va. Tech, its community of researchers, and all of those in that S/W Va. neighborhood who had depended to them.

Well, the world is complex. And we are blessed to have such brilliance and its fruits, and it potential, among us and in our society. But given all of this, I keep coming back to what does this have to do with the education crisis of American kids, including most all of our college kids, in America.

I just know that a big block of words like that shuts down the readers, sends them looking elsewhere, so I don’t waste much time posting a comment after one of those….1,000 words where 100 would have worked…

And then there is Larry the Polemicist who thinks Buffet, Gates and now Fralin are the only persons of great wealth “giving back.” when of course the list of such families and foundations is enormous and crosses all ideological lines. But nasty partisan sniping comes first and facts second.

I tend to stick with what is relevant to the facts at hand in my view, no matter who is the actor at hand, unless there is a new truth to be learned in it. Perhaps too that is why the article I sited was sited as relevant to the post. I also don’t write to satisfy your tastes, or opinions, Steve, nor do I expect you to write for mine.

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